Covid-19: Quoted companies postpone AGM as equities lose N279b

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Many companies have hurriedly postponed indefinitely or rescheduled their annual general meeting (AGM) as the pandemic Coronavirus continued dislocation of the global and domestic capital markets.

Nigerian equities closed weekend with a net loss of N279 billion for the week, representing average decline of 2.35 per cent for the five-day trading period.

As confirmed cases of Covid-19 infection quadrupled and governments announced closure of schools and curtailment of large socio-religious gatherings, quoted companies have postponed their scheduled AGMs of shareholders, a development that may lead to delay in corporate decision-making.

Notore Chemical Industries Plc, which had scheduled its AGM for this Thursday, stated that it was postponing the meeting indefinitely citing the safety of its shareholders, employees and other members of the public. Shareholders of Notore had been scheduled to consider and approve a N40 billion capital raising proposal aimed at strengthening the balance sheet of the agro-allied company.

Notore stated that it would continue to monitor the situation to determine a new date for the AGM.

Greif Nigeria Plc, which had scheduled its AGM for next week, said it has rescheduled the meeting to June 2020 citing the Covid-19 outbreak in Nigeria.

Greif Nigeria stated that it has taken further measure of placing a travel ban on all its employees while advising that meetings with larger groups of participants of more than five persons, whether external or internal, should be avoided.

According to the company, large gatherings are discouraged and alternative methods or rescheduling of such meeting is therefore advised.

“Greif is concerned with the safety and health of its employees, their families and the general public at large,” the company stated.

Greif believed that the only way to truly reduce the spread of the virus is with social distancing for as long as possible until this recedes.

Aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) dropped to N11.568 trillion at the weekend compared with its opening value of N11.847 trillion for the week. The All Share Index (ASI) –a value-based benchmark index that tracks all share prices, also declined from its week’s opening index of 22,733.35 points to close the week at 22,198.43 points.

The continuing price depreciation at the Exchange worsened the negative average year-to-date return for Nigerian equities to -17.30 per cent. In the banking and consumer goods sectors, average year-to-date losses were above 32 per cent and 40 per cent respectively.

The momentum of activities at the NSE also slowed down last week with total turnover closing at 2.80 billion shares worth N32.56 billion in 31,715 deals compared with a total of 3.96 billion shares valued at N43.70 billion traded in 26,054 deals two weeks ago.

Financial services sector remained the most active sector with a turnover of 2.51 billion shares valued at N25.29 billion in 23,243 deals; representing 89.44 per cent and 77.68 per cent of total equity turnover volume and value respectively. The conglomerates sector followed with a turnover of 60.87 million shares worth N105.95 million in 767 deals while the services industry placed third with a turnover of 51.30 million shares worth N117.55 million in 350 deals.

Large-cap banks dominated the trading with the trio of Zenith Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc emerging as most active stocks with a turnover of 1.64 billion shares worth N21.28 billion in 15,631 deals, representing 58.32 per cent and 65.37 per cent of the total equity turnover volume and value respectively.

Also, a total of 15,121 units of Exchange Traded Funds (ETFs) valued at N87.77 million were traded in seven deals last week compared with a total of 75,285 units valued at N472.95 million traded in six deals penultimate week.

In the sovereign bond market, a total of 16,204 units of Federal Government bonds valued at N19.101 million were traded in eight deals compared with a total of 62,290 units valued at N71.46 million traded in 18 deals two weeks ago.

There were 35 gainers and 27 losers last week compared with two gainers and 64 losers recorded in the previous week. However, losses suffered by large-cap stocks overwhelmed the overall market position. Cadbury Nigeria led the gainers, in percentage terms, with a gain of 26.3 per cent to close at N6.25. NPF Microfinance Bank followed with a gain of 23.5 per cent to close at N1.05. United Capital rose by 20.5 per cent to close at N2.41. Caverton Offshore Support Group appreciated by 20.2 per cent to close at N2.50 while Union Bank of Nigeria added 20 per cent to close at N7.20 per share.

On the negative side, Wapic Insurance led the losers with a drop of 22.2 per cent to close at 21 kobo. United Bank for Africa dropped by 18.7 per cent to close at N5. May & Baker Nigeria declined by 16.7 per cent to close at N1.79. Dangote Cement dropped by 15.2 per cent to close at N129.70 while Transnational Corporation of Nigeria declined by 14.3 per cent to close at 60 kobo per share.
Read Also: Real sector wobbles under COVID-19

Concerns had risen over the safety of large gathering of shareholders and other stakeholders at AGM. With shareholders’ base of most companies in thousands and the large number of other stakeholders usually at AGM, the Nigerian Stock Exchange (NSE) issued a circular advising all quoted companies that plan to hold meeting to put in place adequate precautionary measures to ensure the safety of all stakeholders.

Not less than seven companies had scheduled to hold meeting in the next three weeks. Shareholders of Africa Prudential were scheduled to meet today at the AGM in Abuja. Four other companies- Transcorp Hotels, Morison Industries, Transnational Corporation of Nigeria and United Bank for Africa (UBA) had announced that they would be holding their AGM this week. Nigeria’s largest financial institution, Guaranty Trust Bank had scheduled its AGM for next week while Nigerian Breweries and Custodian Investment planned to meet in April.

According to the Exchange, companies that plan to hold their AGMs in the near future should adopt the safety procedures provided by the Nigeria Centre for Disease Control (NCDC) in preparation for their AGMs. Such companies must also adequately communicate these procedures to all invitees to the AGM.

The NSE however noted that companies that wish to postpone their AGMs or are yet to schedule their AGMs, must comply with extant rules and regulations on the timeline and conduct of AGMs. According to the rules, companies must hold their AGM within nine months from the end of their financial year end or within such extended period as may be approved by the Corporate Affairs Commission (CAC).

Section 213(1) of the Companies and Allied Matters Act (CAMA) 2004 stipulates that “every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than 15 months shall elapse between the date of one annual general meeting of a company and that of the next”.

Section 213(1)(b) of CAMA meanwhile permits the CAC to extend the time within which an AGM may be held by a period not exceeding three months.

“The Exchange advises all listed companies to strictly adhere to communications and advice from the health authorities at the NCDC, World Health Organization (WHO) and Lagos State and Federal Ministries of Health in the effort to tackle this dreaded virus,” NSE stated.

The negative national overall market position reflected the global rout as Coronavirus rattled nations. Benchmark indices across the advanced and emerging markets suffered steep decline. In United States, the S & P 500 Index and NASDAQ Index declined by 9.9 per cent and 8.8 per cent . In United Kingdom, the FTSE ASI dropped by 4.0 per cent. Germany’s XETRA DAX Index dipped by 2.5 per cent. France’s CAC 40 Index dropped by 1.5 per cent.

Hong Kong’s Hang Seng Index posted a loss of 5.1 per cent. Japan’s Nikkei 225 Index depreciated by 5.0 per cent. Russia’s RTS Index dropped by 7.2 per cent.

China’s Shanghai Composite Index depreciated by 4.9 per cent. Brazil’s Ibovespa Index lost by 13.5 per cent while India BSE Sens Index declined by 12.3 per cent.

In Africa, South Africa’s FTSE/JSE All Share Index fell by nine per cent. Egypt’s EGX30 Index slumped by 17.8 per cent. Kenya’s NSE 20 Index dropped by 4.7 per cent while Ghana’s GSE Composite Index slipped by 0.2 per cent.

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Obodo Ejiroghene Lucky [Chief Economist] Mr. Ejiroghene Obodo is an economist with over 15 years in Journalism, which cuts across Research and Data analysis. Mr Obodo, a graduate of Columbia University, New York City, with a Degree Journalism Graduate School Field Of Study Citi Journalism Seminar Ejiro was the Online Editor at BusinessDay Media, where he oversees the online editorial department. Proir to this Mr. Ejiroghene Obodo, also known as Lucky, served as a Senior Research Analyst at BusinessDay Research and Intelligence Unit. Prior to this, he was an Analyst at the firm. Ejiro has won series of International awards which includes the most coveted awards Citi Journalistic Award for 2013 See his professional profile listed on Bloomberg

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